The Bank of England’s decision to raise interest rates for only the second time since 2007 is a mixed bag for self-employed, according to freelancer group IPSE.

The Monetary Policy Committee (MPC) voted unanimously to raise the rate by quarter of a per cent to 0.75 per cent.

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Andy Chamberlain, IPSE’s Deputy Director of Policy, said: “The rise in interest rates was expected, though the unanimous 9–0 vote may surprise some and strongly suggests there may be further rate rises.

"It’s clear the Monetary Policy Committee has an eye on inflation, which remains at just over the two per cent target. They will be hoping this modest rise in the interest rate will help bring that number down.

“This should strengthen the pound, which will help self-employed people who make business purchases from abroad, such as software. However, the cost of borrowing will go up, and this will have a negative effect both on businesses looking to invest and on any self-employed people making mortgage payments.

“The Bank’s global economic outlook was also gloomier than some had anticipated, which will do little to assuage self-employed people’s fears about the economy. IPSE’s Confidence Index for Q1 showed that most freelancers expected overall economic performance to deteriorate over the next 12 months.

“To combat this negativity, the Government should avoid any changes that will do further damage to the self-employed. That means abandoning its plan to extend the disastrous changes to IR35 to the private sector. At a time of low productivity and fears about the economy after Brexit, the Government should be doing its utmost to protect one of our key competitive advantages – our dynamic, flexible labour market.”